Per 34 CFR 668.55, applicants are required to update household size
and the number of household members attending postsecondary
educational institutions unless the change results from
a change in
the applicant's marital status. Changes in household size and number
in college may only occur if the applicant is selected for
verification. (The updated household size and number in college should
be accurate as of the verification date.) Changes in dependency status
occur regardless of whether the applicant is selected for
verification.

This can lead to anomalous situations in which a student becomes
independent by virtue of a change in their household, but the
household size on the FAFSA is not updated. For example:

A student discovers that she is pregnant after the application
date. This student becomes independent by virtue of having a legal
dependent other than a spouse (i.e., unborn children count if the
child will be born during the award year and the student intends to
provide at least 50% support to the child during the award year).
But unless she is selected for verification, her household size does
not change.

A student's girlfriend/boyfriend moves in after the application
date. The student is providing more than half the
girlfriend/boyfriend's support and will continue to do so throughout
the award year. (Alternately, replace girlfriend/boyfriend with the
student's child.) This student is independent by virtue of a dependent
other than a spouse. But unless he or she is selected for
verification, the household size remains unchanged.

Most financial aid administrators would resolve this situation by
selecting the student for verification, ask for documentation relating
to the support of the girlfriend/boyfriend/child. The financial aid
administrator may then change the dependency status and household size
if the documentation supports the change. Since the change is the
result of verification, household size may be updated.

Note that the restrictions on updates only applies to changes since
the application date but before the verification date. It does not
apply to corrections. If the financial aid administrator discovers
that the information provided on the FAFSA form was not accurate as of
the application date (i.e., the student was not in fact married on
that date, but sometime afterward), the financial aid administrator
should correct the information to reflect what the status was on the
application date.

The restriction that household size and number in college can only be
updated if the student's application is selected for verification is
one of the reasons why some colleges do 100% verification.